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Best Personal Loans for Bad Credit of March 2024

Review Updated
Dana George
By: Dana George

Our Loans Expert

Nathan Alderman
Check IconFact Checked Nathan Alderman
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Bad credit loans are a type of personal loan made for borrowers with poor credit, typically with a FICO® Score of 579 or less. Bad credit borrowers can have a higher risk of missing payments or abandoning repayment altogether. Personal loan lenders will likely have these borrowers pay a higher-than-average interest rate and possibly extra fees, compared to those with good or excellent credit.

There are lenders that specialize in loans for borrowers in this situation. It's important to seek out the best personal loans for bad credit so you don't overpay for your loan.

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As of Feb. 05, 2024
Lending Partner Min. Credit Score Loan Amounts Apr Range Next Steps
Award Icon 2024 Award Winner
Upstart
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: None Loan Amounts: $1,000 - $50,000 APR Range: 5.20% - 35.99%
LendingPoint
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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Min. Credit Score: 620 Loan Amounts: $2,000- $36,500 APR Range: 7.99% - 35.99%
Achieve
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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Min. Credit Score: 620 Loan Amounts: $5,000 - $50,000 APR Range: 7.99% - 35.99%
Avant
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 580 Loan Amounts: $2,000 - $35,000 APR Range: 9.95% - 35.99%
Universal Credit Personal Loans
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 560 Loan Amounts: $1,000 - $50,000 APR Range: 11.69% - 35.99%
OneMain Financial
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: No stated minimum Loan Amounts: $1,500 - $20,000 APR Range: 18.00% - 35.99%
Disclaimers

*Upstart Loan Disclaimer

The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

Best For: Reducing high interest debt

Award Icon 2024 Award Winner
Logo for Upstart
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Minimum Credit Score
None
Loan Amounts
$1,000 - $50,000
APR Range
5.20% - 35.99%
Term Length
36 or 60 months

We selected Upstart for best personal loans for bad credit because Upstart has more flexible credit requirements compared to many other lenders. There is actually no credit score requirement, which means Upstart will approve some applicants who don't qualify elsewhere.

  • Accepts borrowers with low credit scores
  • Wide range of loan amounts
  • No prepayment penalty
  • Payment grace period
  • High upper-range interest rate
  • High origination fees
  • No cosigner allowed

Best For: Poor credit scores

LendingPoint

Logo for LendingPoint
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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Minimum Credit Score
620
Loan Amounts
$2,000- $36,500
APR Range
7.99% - 35.99%
Term Length
24 - 72 months

LendingPoint makes our list of best personal loans for bad credit because it accepts applicants with a credit score as low as 585 so long as they demonstrate recent responsible credit behavior. Credit scores suffer for many reasons, and you just need to be on the right track now.

  • Soft credit check
  • Low minimum loan amount
  • No prepayment penalty
  • Fast funding
  • Instant approval
  • Higher upper-end APR
  • Expensive origination fee

Best For: Debt consolidation

Logo for Achieve
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
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Minimum Credit Score
620
Loan Amounts
$5,000 - $50,000
APR Range
7.99% - 35.99%
Term Length
24 - 60 months

We chose Achieve for best personal loans for bad credit because it will allow you to apply with a cosigner if you need to. We also like that you can get an interest rate discount if you use most or all of the money to pay off other debt.

  • Competitive interest rates
  • Allow borrowers with poor credit to get approved
  • No prepayment fee
  • Significant variation in origination fees
  • Isn't available in all states
  • High minimum loan amount

Best For: Quick funding with low credit scores

Logo for Avant
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Minimum Credit Score
580
Loan Amounts
$2,000 - $35,000
APR Range
9.95% - 35.99%
Term Length
12-60 months

Avant is one of our picks for best personal loans for bad credit because it's easier to qualify here than it is with other lenders. You need a 580 credit score to apply. Loan amounts range from $2,000 to $35,000 and most fund within a day.

  • Lower credit score requirements
  • Relatively low minimum loan amounts
  • Fast funding
  • No prepayment penalties
  • Higher APRs
  • Administration fee of up to 4.75%

Best For: Low credit and low loan amounts

Universal Credit Personal Loans

Logo for Universal Credit Personal Loans
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Minimum Credit Score
560
Loan Amounts
$1,000 - $50,000
APR Range
11.69% - 35.99%
Term Length
36 - 60 months

Universal Credit Personal Loan is a good fit for borrowers who may have some negative information in their credit file, but who need a personal loan to consolidate debts or cover a large expense.

  • Flexible repayment terms
  • Loans for borrowers without stellar credit
  • Fast funding
  • No prepayment penalties
  • Highly rated mobile app
  • High APR range
  • Origination fees are higher than most competitors'

Best For: Secured loans

OneMain Financial

Logo for OneMain Financial
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Minimum Credit Score
No stated minimum
Loan Amounts
$1,500 - $20,000
APR Range
18.00% - 35.99%
Term Length
24 - 60 months

OneMain Financial is interesting in that it minimizes the importance of credit scores. Instead, it considers the overall financial picture of each applicant. Another unusual feature of OneMain Financial is that it's one of the few online lenders that allows for secured loans.

  • Loan amounts as low as $1,500 in most states
  • Terms as short as 24 months
  • Relatively high customer satisfaction reviews
  • High APRs
  • Loan may require collateral
  • Only operates in 44 states
  • May require in-branch visit to close

Are personals loan for bad credit right for you?

The best loans for poor credit might be a good option if you urgently need money while you are in the process of rebuilding your credit. Weigh whether you really need that money right now or if it can wait until you've improved your credit. Crunch the numbers to see how much you can afford each month and how much it will cost you overall.

Deciding whether a personal loan for bad credit is right for you is a matter of being clear about your financial goals and whether that loan will help you meet them.

Compare poor credit loans

Lending Partner Min. Credit Score Loan Amounts APR Range Best For
Upstart None $1,000 - $50,000 5.20% - 35.99% Reducing high interest debt
LendingPoint 620 $2,000- $36,500 7.99% - 35.99% Borrowers with poor credit scores
Achieve 620 $5,000 - $50,000 7.99% - 35.99% Diverse offerings
Avant 580 $2,000 - $35,000 9.95% - 35.99% Borrowers with poor credit scores
Universal Credit Personal Loans 560 $1,000 - $50,000 11.69% - 35.99% Easy application
OneMain Financial No stated minimum $1,500 - $20,000 18.00% - 35.99% Secured loans

What credit score is considered "bad"?

A score between 300 and 579 is considered bad. It indicates to lenders that you've had trouble paying bills in the past and may not be on solid financial footing.

Classifying credit scores as "excellent" or "poor" is not an exact science, but here's a rough breakdown of how creditors view a borrower's credit history using their FICO® Score (the most widely used type of credit score by lenders):

Rating FICO® Score Ranges
Exceptional 800-850
Very good 740-799
Good 670-739
Fair 580-669
Poor 300-579
Data source: The Ascent

Does APR really matter for bad credit loans?

It can be a bit surprising to learn how much more a high APR loan will cost. According to a study by The Ascent of personal loan statistics for 2022, the average personal loan balance in the U.S. is just shy of $10,000. That's the number we'll use to illustrate the difference a credit score can make.

RATING LOAN TERM APR MONTHLY PAYMENT TOTAL INTEREST PAID
Excellent 60 months 8.0% $203 $2,166
Good 60 months 13.5% $230 $3,806
Poor 60 months 28.5% $314 $8,863
Data source: Author's calculations.

What do the best bad credit loan companies look for in an application?

Once you fill out a loan application, a personal loan lender considers two primary things: Your credit score and your debt-to-income ratio (DTI).

  • DTI: Your DTI refers to how much you owe compared to your monthly income. The lower your DTI, the more confident a lender will be that you earn enough money to make all your payments on time.
    • For example, if you earn $5,000 a month and your rent, car payment, and credit card payments amount to $2,000, your DTI would be 40%.
  • Credit score: This is a number between 300 and 850 that indicates how well you've dealt with credit in the past.
    • If you've been late on payments, suffered a foreclosure, filed for bankruptcy, or have too much debt in relation to your income, your credit score may be low. Setting a minimum credit score helps a bank, credit union, or online lender establish the maximum level of risk they are willing to take.

What are the credit scores for poor credit loans based on?

It can help to think of your FICO® Score as a pie, cut into five pieces. Not all five pieces are the same size as some weigh more than others. Here's how each piece plays into your credit score.

  • The largest piece of the credit pie is payment history at 35%. Each month, your creditors report to the "big three" credit reporting agencies -- TransUnion, Equifax, and Experian. Each time you make a payment on time and in full, the payment history piece of the pie benefits. Any time you're 30 days or more late, this piece takes a hit.

  • A slightly smaller piece of the pie is referred to as "amount owed." When you apply for a new loan, creditors want to make sure you're not already overextended. Creditors like to know that you have access to credit but are careful about how you use it.

  • Simply put, the longer you've had credit and have been paying bills, the better a creditor is likely to feel about your ability to handle new debt.

  • Another thing creditors want to know is that you can handle different types of debt. There are two types:

    • Revolving accounts, such as credit cards, that have flexible payment amounts and that you can borrow from when you want
    • Installment accounts, such as personal loans, that require fixed monthly payments

    The more varied your credit mix, the higher this portion of your score will be. However, since this is a small piece of the pie, it's not worth opening new accounts just for a small potential increase to your credit score.

  • How often you've applied for new credit goes into calculating this portion of your credit report. If you've recently applied for several loans or new credit cards, it makes creditors nervous about how much credit you're willing to take on.

The good thing about understanding what goes into your FICO® Score is how it allows you to make positive changes. For example, since you know payment history makes up 35% of your total score, you can be doubly careful about getting all payments in on time. And since you're aware that 30% of your score is based on how much you owe, you can concentrate on chipping away at your balances.

What type of credit check do personal loan lenders run for bad credit?

Most personal loan lenders run a "soft" credit check to determine whether or not you're a good candidate for a loan. That's good news because a soft credit check has no impact on your credit score. It's not until you accept a loan offer that a "hard" credit check is run.

A hard credit check will ding your credit score (possibly by a few points), but your score will rebound quickly with regular payments. In fact, if you use the personal loan to pay off another existing debt, it's possible that you'll see a boost in your credit score almost immediately.

What's the difference between secured and unsecured loans for bad credit?

A secured loan requires you to put something of value up as collateral. Typically, if an item can be appraised it can be used as collateral. This includes valuable jewelry, rare coins, collectable cars, and even retirement accounts. The advantage of a secured loan is that the lender offers you a lower interest rate than it would offer if the loan was unsecured. The disadvantage is why it offers you a lower rate. The lender knows that if you fail to make payments it can take possession of the collateral, sell it, and recoup its losses.

Unsecured loans are when a lender checks your credit history, and if your loan application is approved, lends you money on the promise that you'll repay the loan. You put nothing on the line.

It's clearly more expensive to borrow money if you want loans for very poor credit, but there are advantages worth mentioning.

Advantages of a bad credit loan

Here are some of the advantages of taking out a bad credit loan.

  • Clear loan payment plan: From the day you take out a personal loan, you know precisely how much your monthly payments will be and when the loan will be paid off (also known as the repayment term). This information can help you plan for your financial future.
  • Debt consolidation: You may be able to consolidate higher-interest debt into one loan, simplifying your life. In some cases, this can also lower your interest rate or even lower your monthly payment. This may mean stretching your payments over a longer period of time. But if, for example, you are facing bankruptcy, longer repayment terms on a personal loan might give you some breathing room.
  • Give you the money you need, quickly: Fast loans for bad credit means you have access to money when your water heater goes belly-up or some other financial emergency creeps into your life. The process is quick and funds are typically dispersed within one or two days.
  • Avoid unscrupulous lenders: You can borrow from a reputable lender rather than deal with a payday lender or title loan company. These loans are designed in a way that makes them difficult to pay off by the due date. The bonus for the predatory lender is that you must then take out another loan to pay off the original loan. That means paying another set of expensive fees and a ridiculously high annual percentage rate.
  • Build your credit: If you make your loan payments on time, a personal loan can help to build your credit. That may mean you can qualify for a lower interest rate the next time you need a loan.

Even if your credit score isn't perfect, you still have loan options. No matter what a report from a credit bureau says about your payment history, you likely have access to a bad credit personal loan.

Disadvantages of personal loans for bad credit

Before making a financial decision, it's essential to be aware of the disadvantages. Here are a few potential downfalls that can impact even the best personal loans for bad credit and low income.

  • You might not stop spending: Say you use a personal loan to pay off higher-interest credit card debt. Once those cards have been paid off, nothing is keeping you from charging them back up. One disadvantage of a personal loan for bad credit is that you could end up with new credit card debt in addition to the consolidation loan.
  • The interest rate may be high: It can be discouraging to compare the interest rate you will be charged for your loan to the interest charged for the same loan to someone with good credit. Don't dwell on this. Make sure you have a solid plan for your loan, like getting rid of really high interest debt and building your credit score. Then, as long as you shop around for the best deal for your circumstances, you can stay focused on your own goals.
  • You don't make your monthly loan payment: If you commit to a loan you can't afford, or your financial circumstances change, you may find yourself in a position where you can't meet your obligations. This would hit your credit score even harder and leave you in a worse position.
  • You might have to put up collateral: Depending on your lender, you might need to put up collateral to get loan approval. This is known as a "secured loan," and if you can't make your monthly payment, the lender can seize your collateral to help cover their costs. If you want to avoid this, look for an unsecured loan.
  • You may have to pay extra fees: Many personal loans charge an origination fee between 1% and 8% of the loan. You may also find loans that charge prepayment penalties if you want to pay back your loan ahead of the loan term. Make sure you factor in all costs when comparing loans. The best bad credit loans have minimal fees.

READ MORE: What Is a Personal Loan Origination Fee?

What are extremely bad credit loans?

Payday loans are a type of personal loan with short-terms and high-interest. It's typically meant for borrowers with bad credit or no credit history. Pay day lenders can charge APRs of 400% or more and trap borrowers into a vicious cycle of borrowing.

Even if you only plan to take out a small loan, working with a predatory lender is a dangerous financial proposition. These lenders are so dangerous that many states prohibit or heavily regulate them. Keep this in mind as you compare lenders.

Also keep an eye out for bad credit scams, like companies telling you they can wipe your bad credit away -- for a fee. No company can do anything to change your score that you can't do yourself. It may take time, but it will be worth it in the end to work toward boosting your own score.

If used responsibly, a personal loan from a reputable lender might help you to improve your financial situation in the long run.

Alternatives to bad credit personal loans

One of the most interesting things about personal finance products is that there is no one-size-fits-all solution. We need to scan the landscape to figure out what works best for us, and personal loans are no exception. Here are some alternatives:

Family: If you're in a pinch, there's no shame asking a family member to lend you money. Before you accept the cash though, make sure you write up a simple IOU. It should include how much you must repay each month, how long you have to repay the loan, the interest rate being charged (if they are charging interest), and what happens if you fail to repay the loan as promised. While it may sound silly to write an IOU to someone you're close to, it conveys respect and reminds you of your promise.

Cosigner: If you have someone in your life with strong credit, ask them to cosign your loan. A loan cosigned by someone with good or excellent credit will qualify for a better interest rate than one designed for a borrower with bad credit. Before asking someone to cosign, though, think long and hard. Remember that if you don't pay, the cosigner will be responsible for your debt. If there is any chance that you will not be able to keep up with your payments, you could be putting an important relationship in jeopardy.

Peer-to-peer lender: Another option for borrowers with a low credit score is to apply for a loan through a peer-to-peer lender. These loans are made by everyday people, based on the level of risk they're willing to take.

Here's how it works: You apply for a loan and the marketplace (the place you applied) matches your application with investors willing to make the loan. The lower your credit score, the higher the risk for the lender. Due to the increased risk, your interest rate will be higher than it would be if your credit score was stronger.

When your credit improves, you may also be able to qualify for a balance transfer card. This would let you consolidate high-interest credit card debt onto a card with a 0% intro APR.

FAQs

  • You can get a loan with any credit score, as some lenders don't have a minimum credit score requirement. But if you have a low credit score, the interest rate on a loan can be prohibitively high.

  • Yes, loans can help build credit if you pay all monthly payments in full and on time.

    But it's also important to keep your debt-to-income ratio at 36% or below, and taking out a new loan may nudge your ratio higher than that.

  • It takes lenders anywhere from one day to two weeks to fund the loan once you apply and are approved. If the speed at which the loan is funded is important, make sure to ask the lender before applying.

  • A cosigner may help you qualify for a loan you would not otherwise be able to get. A cosigner with a good credit score can even help you snag a lower interest rate.

    The important thing is to pay the loan as agreed. Otherwise, your cosigner is on the hook for it.

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